Accounts Notes: AUDIT OF ACCOUNT

Friday, 25 March 2011

AUDIT OF ACCOUNT

All active members of stock exchanges are required to get their accounts audited by a Chartered Accountant. Active member is any member who has conducted business in securities even for a single day in the year.
Books of Accounts and other Documents Subjected to Audit
A member holding membership of many stock exchanges or different segments of same exchange (derivatives/capital market segment), he has to maintain separate records and documents with respect to each exchange or each segment.
A member of the exchange is required to maintain the following books of accounts –
• Register of transactions / Sauda Book
• Clients ledger
• General ledger
• Journal Register
• Cash Book
• Bank pass book
• Documents (received / delivered) register
• Members contract book showing details of all contracts entered into by him with other members of the same exchange.
• Counterfoils or duplicates of contract notes issued to clients.
• Written consent of clients to the contracts entered into as principals.
• Margin deposit book.
• Register of accounts of sub brokers.
• Copies of agreements with sub-brokers.
• Copies of margin statements down loaded from the exchange.
• Details of spot delivery transactions.
• Clients database and member client agreement.
• Copy of registration certificate of each sub-broker.
• Copy of the power of attorney / board resolution authorizing the directors / employees to sign the contract notes.
• Copies of pool account statements.